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Downsizing Blog

Since the 1960s, the Catalog of Federal Domestic Assistance (CFDA) has provided a list of all federal subsidy programs. That includes subsidies to individuals, businesses, nonprofit groups, and state and local governments. The CFDA includes subsidies for farmers, retirees, school lunches, rural utilities, the energy industry, rental housing, public broadcasting, job training, foreign aid, urban transit, and much more.

The federal Highway Trust Fund (HTF) is running out of money. Congress will likely pass a short-term fix for the program in coming weeks. Over the longer term, many policymakers favor raising taxes to close the $14 billion annual gap between HTF spending and revenues.

Perhaps the most suspicious thing about the disappearance of Lois Lerner’s emails is that the IRS is not a small business operation that cannot afford high-quality computer, email, and backup systems. It is a huge modern bureaucracy that has computer technology at the core of its operations. The IRS IT budget in 2014 is a massive $2.4 billion (page 149 here).

One of the policy fissures in the Republican Party is over business subsides, and the current debate about the Export-Import Bank illustrates the conflict. The Ex-Im Bank is one of many corporate welfare or crony capitalist programs that litter the federal budget. The Bank’s authorization runs out in September, and so Congress must act if it wants to extend the operations of this business subsidy machine.

A tragedy is unfolding in Texas as thousands of illegal immigrants are pouring over the southern border. Alex Nowrasteh has examined the immigration statistics here. But in this blog, let’s take a look at the budget situation.

Last week the Senate voted to greatly increase health care spending for veterans. If the new spending were made permanent, it would cost at least $385 billion over 10 years, as Nicole Kaeding noted. The House version of the bill would cost at least $477 billion if made permanent. The chambers will now work out a compromise bill, and—going out on a limb here—I’m guessing that the compromise is also a budget buster.